Restrictions and Price Remain iTunes Turnoffs

[Bombardier]

A year ago this month, the music-downloading business came to life with the debut of Apple's iTunes Music Store. By the numbers, the store has done outrageously well. More than 50 million songs have been downloaded off the service to both Windows and Mac OS X machines and the store is on track to hit 130 million songs a year, Apple brags.

A flock of competitors, including stores from Roxio, RealNetworks and Wal-Mart, have followed Apple without catching up -- not in ease, not in elegance and not in numbers of downloads.

But the iTunes Music Store's success hides a couple of unsettling trends. One is pricing -- a lot of albums now exceed the store's customary $9.99 price, and a few even exceed their cost as CDs in a store. The other is compatibility -- though a variety of consumer-electronics devices could be made compatible with iTunes music files, the only one Apple permits is its own iPod digital-music player.

As the store approaches its first birthday on April 28, current and potential iTunes customers would be wise to note how Apple and the record labels address these concerns.

Album prices have gotten the most attention lately, thanks to a few egregious examples. For instance, Janet Jackson's "Damita Jo" goes for $16.99 on iTunes, while the CD will run you $9.99 at Best Buy. Indie-rockers Modest Mouse's "Good News for People Who Love Bad News" carries a $13.99 price tag at iTunes, while Barnes & Noble's Web site lists it at $9.73.

Other cases of iTunes inflation are more subtle. Bob Dylan's "Highway 61 Revisited," at $13.99, costs the same on iTunes as on Amazon.com -- but the disc the Web retailer sells is a hybrid SACD (Super Audio Compact Disc) that offers better-than-CD sound on new players while still working in older stereos.

"The Essential Bruce Springsteen," a three-disc compilation released last year, costs less on iTunes than in most stores. But while the first two-thirds of the set -- previously released tracks that Springsteen fans already own many times over -- can be bought individually, the live versions and other rarities on the third CD aren't sold a la carte. People who already have multiple CD shelves devoted to the Boss (i.e., me) are effectively being asked to pay $19.98 for 12 songs.

This doesn't seem to be a widespread trend, yet. Of the almost 120 albums released on iTunes over the past three weeks, I would describe only 13 as instances of price gouging.

Apple says that any higher prices are influenced by what the record labels charge the company for each release. The labels, meanwhile, insist that they don't control stores' price tags. The wholesale prices they set leave room for retailers to choose their own profit margin -- which can be less than zero, in the case of CDs sold as loss leaders.

A representative for EMI Music North America (which owns Virgin Music, Jackson's label) added that its digital downloads cost less at wholesale "across the board" than its CDs.

Whoever is at fault, this seems an unhealthy state of affairs for the labels themselves. Haven't they been complaining that CDs, with their lack of copying restrictions, make file-swapping too easy? So why would they want to steer customers away from digital downloads with built-in copy controls?

The copy controls in iTunes, however, can be a sore point in their own right. Apple's generous usage rules, which allow nearly unlimited burning of iTunes AAC (Advanced Audio Coding) files to audio CDs, don't let you do much with the AAC files themselves.

You can't dump 150 AACs on a data CD-RW and listen to that in a compatible car or home stereo. You can't copy them to your handheld organizer, unless you burn them to an audio CD and then convert the tracks again to MP3s. You can't stream them from your computer to your stereo over a home network.

None of those things is possible, because currently the only device besides a Mac OS X, Windows 2000 or Windows XP computer that can play an iTunes AAC file is the iPod. Despite many requests by other companies to open up this format for use on other devices, Apple acts as though the iPod and variants of it (such as the licensed copy that Hewlett-Packard will sell later this year) are enough.

It may very well have other devices up its sleeve, but the company, as usual, refuses to talk about them. That's the problem right there -- Apple wants customers to advance into this digital-music future without a map. In so doing, it's showing itself at its least attractive: resolutely proprietary and secretive to a fault.

The market, however, has a way of solving these problems. Earlier this month, an open-source program called PlayFair appeared online. It allows an iTunes customer who owns either an iPod or a Windows machine authorized to play his or her purchases to remove the copy controls from those AAC files. (PlayFair does nothing to songs you don't own; it's useless to thieves.)

I tried this program on a purchased song and found it worked as promised, making an unprotected copy of the AAC file that included the original title/track/artist info and album-cover art. A program like this makes my iTunes purchases even more valuable to me; it's too bad that I had to break the music store's terms of service to do this.

Apple has fired off cease-and-desist letters to sites hosting this software, which soon took it offline (most recently Friday). This whack-a-mole game may go on for a while, as Apple's lawyers pursue PlayFair around the Web.

But the best way for Apple to beat this program is to make it obsolete. Let buyers listen to their iTunes files on more than just iPods, and they won't need to tinker with third-party software. They might even stomach the occasional higher price on an album.

http://www.washingtonpost.com/wp-dyn/artic...-2004Apr17.html

[DudeAsInCool]

Good post. Unlike Microsoft, I think Apple will eventually resolve these problems re: for car use, MP3s, etc. I think this may be a case where technology moves faster than they can adopt. I could be naieve, but Apple is generally more flexible than most companies.

Cant say I disagree with Apple re: the knockoff IPods...

[Redneck4sure]

only mp3 for me. I have mp3 decoding cd players in car, house, boom box, personal cd player. I have no interest in any other format at this time.

[Ken]

Hmm, iTunes, let's see.......no format options, pricey, lesser quality, limited selection (and always will remain non-existent on those live bootleg recordings, or rare tracks).

P2P, hmm, let's see....

Endless possibilities for many formats of excellent quality (if you look in the right place). Massive selection of many live/bootleg and rare tracks.

Cost: $0.00

You can win people over from free to pay, but a LOT (a whole lot) needs to be improved.

It has to be so stocked, and low in price, and non-restrictive, that it simply becomes inconvinient to search P2P networks, and not worth the effort.

I don't think anyone is up to the task.

Edited April 18, 2004 by Ken

[DudeAsInCool]

Hmm, iTunes, let's see.......no format options, pricey, lesser quality, limited selection

That does pose a problem or two... :rotfl:

[Redneck4sure]

That does pose a problem or two... :rotfl:

yup! More like 3 or 4!